Yet again, Google Ventures totally knew from the start that a company sucked
There is an explosion in corporate venture capital and a lot of excitement about new entrants who are totally cool. These aren’t like those fusty old corporate VC guys – investing off a P&L hoping to either find something to acquire or lock up rights to be the first look to acquire something and screw any other options up.
The patron saint of this new hope (or delusion depending on just how much you hate corporate VCs) is Google Ventures – or "GV" as it likes to be called now (so cool!).
Sure,“GV” has gone through its share of disarray. From our post in 2014:
At Google Ventures, this much seems clear: Earlier this year, [Kevin] Rose and [MG] Siegler were positioned as the future of the firm. Now, neither of them is a full-time partner in the US.
This means one of two things. Either, being a partner at Google Ventures simply doesn’t require the same level of commitment as a partnership of a typical venture firm. If that's the case, companies should beware taking their money, or they should do so without any expectation of continuity. (Add to that the history of asking money back, and leaking that to the press and this argument only grows stronger.)
The alternative explanation is that Google Ventures has cleaned house, albeit discreetly, due to disappointing performance or a strategy that's fallen out of favor with the top. Either way, it doesn’t look good for the corporate VC firm that so many people thought would reset the perception of corporate venture.
Having shed its younger, hipper GPs, Google Ventures seemed to be going back to its moonshot roots. That’s a good thing, in my book. As Chamath Palihapitiya recently wrote, too many VCs are hamstrung by getting the easy consumer wins, and don’t invest enough in true disruption.
One thing seems consistent with Google Ventures: A surprising smug preachiness.
The latest example came from founder Bill Maris, who added his torch and pitchfork to the mob going after Theranos, telling Business Insider with haughty – and late – insistence that they knew the science was dodgy all along. From the piece,
"We looked at it a couple times, but there was so much hand-waving — like, Look over here! — that we couldn't figure it out," Maris tells Business Insider. "So, we just had someone from our life-science investment team go into Walgreens and take the test. And it wasn't that difficult for anyone to determine that things may not be what they seem here."
A good portion of Valley elites on Twitter were a little sick of this routine.
After all this isn’t the first time.
Google Ventures managing partner Bill Maris told The New York Times that Secret's decision to raise another round of financing worth $25 million just a few months after raising its first round — which Google Ventures participated in — was one of the main reasons Google Ventures decided to not re-up its participation.
And then there was the weird Google Ventures rejection of Bustle… after it had already invested.
Of course, when star Google Ventures company Uber has been repeatedly caught in far worse scandals, “GV” has remained remarkably silent.
Let’s get this straight: “GV” has the expertise to suss out faulty science but does nothing about it until well after the fact, then throws a press-addled company under the bus with zero new information except that Google Ventures knew it was troubled.
Its own company, Secret, broke all the gentlemanly agreements of building companies and “GV” seemed unable to do anything, until it came time to throw it publicly under the bus as it gasped for life. Sure, complying with a New Yorker photographer who asks you to put a laptop on a female employee’s legs is grounds for a public and embarrassing retrenchment that could kill a less-connected venture. But Uber making a series of moves so egregious they earned the public rebuke of UN Women? Totally fine.
If I were an entrepreneur raising money today I’d be wary of taking anything from “GV” – or, after the Theranos story, even pitching them.
We’ve written before that the marketing in the venture world has gotten out of control. But Maris might just take the cake. At least Bill Gurley has called out troubling burn rates – even among individual companies – before the correction. Sure he has an agenda, but at least it’s to bolster his portfolio not his “TOLD YOU SO!” personal investing chops.
It also shows a flaw in the supposed beauty of corporate VCs operated out of companies obscenely flush with cash. With only a single LP to answer to, and a partnership that seems to come and go in less time than a normal fund would even be invested, where is the accountability?